Reverse annuity mortgages, more commonly known as “reverse mortgages” allow homeowners to use the equity in their home to supplement their monthly income. They are gaining popularity as with senior citizens as a method to provide a monthly income to supplement their fixed income and meet monthly expenses. A reverse mortgage financial instrument allows the homeowner to retain home ownership while receiving tax-free income each month. Reverse mortgages doe not have to be repaid until the borrower moves, sells, refinances the property or dies. If the property is sold, any remaining proceeds after the mortgage is paid off are distributed to the homeowner or next of kin.
Reversible mortgages have not been widely used outside of the senior citizen demographic. It would therefore be advantageous to provide a reverse mortgage instrument that appeals to other segments of potential homeowners. It is thus to such a reverse mortgage instrument that the present disclosure is primarily directed.